A Review of the Nigerian Energy Industry

Financial market update

16 October 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigerian Foreign Exchange- The Central Bank offered USD 180 million and sold USD 162.22 million at yesterday’s CBN auction. They maintained a marginal rate of 157.3075 (including the 1% commission).

Nigerian Bonds – Ahead of the auction on Wednesday some demand filtered into the market on the 16.39%, 2022 and 15.10%, 2017 with the 16.00%, 2019 being sold off. We will likely see volatility ahead over the next two days as the auction expectations play out in the secondary market.

Nigerian Treasury Bills – The new one- year was listed on Monday and traded down 20bps, demand was weak in general, most of it feeding into short dated bills

Nigerian Money Market – OBB and unsecured O/N rates are averaging 11.00% & 12.00% to close on Monday.

ZAR: South Africa’s rand was a touch firmer against the dollar but remained vulnerable to labour unrest that has sent the currency plunging over the past several weeks. Kumba Iron Ore late on Monday fired more than 100 strikers who halted operations at its giant Sishen mine and threatened to destroy equipment worth hundreds of millions of dollars.

JPY – The dollar hit a one- month high against the yen and tested a key resistance level after the US retail sales data came in stronger than expected. The dollar rose 0.3 percent to 78.88 yen. Earlier, it rose to as high as 78.91 yen on trading platform EBS, the dollar’s highest level since Sept 19.

CNH: The yuan edged up in light trading after three straight days of successive record highs, as traders and clients grew cautious as the currency approached 6.25 per dollar. The yuan forward market continued the trend of moving closer to the spot price as spreads narrowed. The on-shore one year forward contract changed hands at 6.4048, shrinking its spread against the spot price by over two basis points since Oct 10.

Indicative Currency Exchange Rates
                          Bid          Offer
EURUSD       1.2965        1.3025
GBPUSD        1.6070       1.6120
USDJPY         78.65          79.15
USDCHF        0.9275       0.9325
GBPEUR        1.2360       1.2410
USDZAR        8.7300       8.7400
USDNGN       157.25        157.75
JPYNGN        1.9860       2.0060
CHFNGN       168.40       170.30
EURNGN       203.00      206.00
GBPNGN        251.00      255.00
ZARNGN        17.01          19.01


Brent futures rose above $ 116, underpinned by supply concerns after the European union slapped more sanctions on Iran, while ample supplies and healthy inventory in top consumer the United states capped gains.

Interest rates
NIBOR (%)                     LIBOR (%)
O/N            11.4583       USD 1 month          0.21400
7 Day          12.2500      USD 2 month          0.27350
30 Day       13.6667       USD 3 month          0.33025
60 Day       14.0417       USD 4 month          0.41410
90 Day       14.3750       USD 6 month          0.58990
USD 12 month         0.92900
Y/Y Consumer Inflation August 2012 :           11.7%
FX Reserves: 10 October 2012 (USD bn)        41.60
MPR                                                                        12.00%
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria

                           Hi             Low               Close      Prev.Close
USD/NGN   157.48/58   157.28/38    157.43/53   157.30/40

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